Mr. Gutierrez (for
himself, Mr. Kanjorski,
Mr. Capuano,
Ms. Moore of Wisconsin, and
Ms. Lee of California) introduced the
following bill; which was referred to the Committee on Financial
Services

A BILL

To amend the Federal Deposit Insurance Act to return a
sense of fairness and accountability to the deposit insurance premium
assessment process, and for other purposes.

1.

Short title

This Act may be cited as the
Bank Accountability and Risk
Assessment Act of 2009.

2.

Findings and
purpose

(a)

Findings

Congress
makes the following findings:

(1)

The unprecedented
Government intervention into the financial markets in 2008 was required by a
threat to our Nation's economy from large, complex, and deeply inter-connected
financial institutions, many of which were on the verge of failing.

(2)

The necessary
Government intervention in the financial system placed hundreds of billions of
taxpayer dollars at risk.

(3)

Many of the financial institutions involved
in the crisis were so large and their dealings so intertwined that their
failures could have led to the collapse of America's financial system.

(4)

The scale of the
banking system crisis put severe strains on the Deposit Insurance Fund of the
Federal Deposit Insurance Corporation.

(5)

The depository
institutions that present a systemic risk to the financial system would
overwhelm the resources of the Deposit Insurance Fund if one or more of them
were to fail.

(6)

Without a
substantial increase in the Deposit Insurance Fund, depository institutions
that are deemed too-big-to-fail will remain potential threats to
the health of the entire financial system and possibly place U.S. taxpayer
dollars at risk.

(7)

It is inherently
unfair to require the financial institutions that are too small to be systemic
risks, or that do not become involved in the most risky, questionable, and
harmful financial practices, to share the financial responsibility for the
failures of these too-big-to-fail institutions.

(8)

Large depository
institutions whose failure may threaten the safety and soundness of the entire
financial system should be assessed premiums based on their potential risk to
the system, not just on the deposits they hold.

(9)

The Deposit
Insurance Fund should be insulated against potential financial crises, the
financial institutions that cause a crisis in the future must be held
accountable, and U.S. taxpayer dollars should not be placed at risk.

(b)

Purpose

The
purpose of this Act is to maintain the safety and soundness of the U.S. banking
system by ensuring that the Federal Deposit Insurance Corporations' Deposit
Insurance Fund is adequately capitalized to respond to the failures of large
depository institutions that would otherwise threaten our financial system and
to return a sense of fairness and accountability to the deposit insurance
premium assessment process.

3.

Accounting for
actual risk to the Deposit Insurance Fund

(a)

Section 7(b)(1)(C)
of the Federal Deposit Insurance Act is amended to read as follows:

(C)

Risk-based
assessment system defined

For purposes of this paragraph, the term
risk-based assessment system means a system for calculating a
depository institution's assessment based on—

(i)

the probability that the Deposit Insurance
Fund will incur a loss with respect to the institution;

(ii)

the likely amount of any such loss;

(iii)

the risks to the Deposit Insurance Fund
attributable to such depository institution and its affiliates, taking into
account—

(I)

the amount,
different categories, and concentrations of assets of the insured depository
institution and its affiliates, including both on-balance sheet and off-balance
sheet assets;

(II)

the amount,
different categories, and concentrations of liabilities, both insured and
uninsured, contingent and noncontingent, including both on-balance sheet and
off-balance sheet liabilities, of the insured depository institution and its
affiliates; and

(III)

any other
factors the Corporation determines are relevant to assessing the risks;
and

(iv)

the revenue
needs of the Deposit Insurance
Fund.

.

(b)

Section 7(b)(1)
of the Federal Deposit Insurance Act is further amended by redesignating
subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively, and by
adding the following new subparagraph (E):

(E)

Systemic risk
premium

(i)

In
addition to any annual assessment imposed under paragraph (2) or special
assessment imposed under paragraph (5), the Board of Directors shall impose a
systemic risk assessment, at least annually, on all systemically important
depository institutions. For purposes of the subparagraph, systemically
important depository institution shall mean an insured depository
institution that is designated as systemically important by the Corporation, in
consultation with the Secretary of the Treasury and the Board of Governors of
the Federal Reserve System, or that is an affiliate of a depository institution
holding company or, in the case of an industrial loan company, controlling
parent company designated as systemically important by the Corporation, in
consultation with the Secretary of the Treasury and the Board of Governors of
the Federal Reserve System.

(ii)

In designating an insured depository
institution, depository institution holding company, or controlling parent
company as systemically important, the Corporation shall take into
account:

(I)

the amount,
different categories, and concentrations of assets of the entity and its
affiliates, including both on-balance sheet and off-balance sheet
assets;

(II)

the amount,
different categories, and concentrations of liabilities, both insured and
uninsured, contingent and noncontingent, including both on-balance sheet and
off-balance sheet liabilities, of the entity and its affiliates;

(III)

the activities
of the entity and its affiliates;

(IV)

the relevant
market share of the entity and its affiliates; and

(V)

the potential
adverse effects on economic conditions and financial stability, in the event
any of the grounds in (c)(5) were to exist with respect to such
entity.

.

(c)

Section 7(b)(2)
of the Federal Deposit Insurance Act is amended by striking paragraph (D) and
by redesignating subparagraph (C) as subparagraph (D).

4.

Creating a
risk-focused assessment base

Section 7(b)(2), as amended, is further
amended by adding the following new subparagraph (C):

(C)

Assessment
base

The assessment of any insured depository institution imposed
under this subsection shall be an amount equal to the product of—

(i)

an
assessment rate established by the Corporation; and

(ii)

the amount of the
insured depository institution's average total assets during the assessment
period minus the amount of the insured depository institution's average
tangible equity during the assesssment
period.